VietNamNet Bridge – The Vietnam Coffee and Cocoa Association (Vicofa) has asked for preferential credit support from the Government to temporarily stockpile about 300,000 tons of coffee to stabilize coffee prices for the benefit of local farmers.

If the approval is given, around 200,000-300,000 tons of coffee will be purchased for this time’s stockpiling, equivalent to one fifth of the country’s total yield in the crop 2013-2014, Vicofa said.

The stockpiled volume will depend on the market price movements in the near future. At present, local Robusta coffee prices have declined to VND37,000-38,000 a kilo from the VND46,000 recorded at the end of this year’s first quarter.

Regarding Vicofa’s coffee stockpiling proposal, the director of a coffee trading company said it will be good news for local coffee trading enterprises if the tentative plan gets a nod from the Government. That is because the Government’s assistance towards coffee purchase for temporary storage will make industry players struggling with seeking outlets more proactive in capital arrangement for purchasing coffee for export in the crop 2013-2014, he explained.

Besides, the Government’s support for purchasing coffee for stockpiling will also help lessen pressure on local farmers who need money for coffee farming.

The country has many years not resorted to coffee stockpiling owing to stable coffee prices. And given the on-going coffee price falls, farmers will be more confident in the next crop upon the Government’s approval of the stockpiling assistance.

The country exported an estimated 91,000 tons of coffee last month, dwindling 22% month-on-month, taking the six-month volume to a combined 795,000 tons, a slump of 24% year-on-year, according to the Ministry of Agriculture and Rural Development.

Source: SGT